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The Nikkei View

A more complex BOJ policy calls for more dialogue with the markets

Japan's central bank must be vigilant about side effects of prolonged easing

The BOJ's decision to keep the easy money flowing carries risks that need to be carefully monitored.    © Reuters

At its two-day policy board meeting ended on July 31, the Bank of Japan essentially told us this: It is lowering its consumer price growth projections and is prepared to further prolong its ultra-easy monetary policy, while being mindful of the possible economic side effects of such measures.

One could call this a practical response to the current economic reality, in which consumer prices still lack upward momentum. Still, there is no denying that the central bank's monetary policy has become increasingly complicated and difficult to understand. For the sake of clarity, the BOJ should redouble its efforts to have dialogue with markets and explain its thinking to the public.

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